More employers plan to freeze hiring, moderate wages as business sentiment dips: SNEF poll

[SINGAPORE] A larger proportion of employers reported uncertain business prospects this year and are planning for hiring freezes and wage moderation next year, indicated a survey by the Singapore National Employers Federation (SNEF) on Tuesday (Dec 2).

This year, 72 per cent of respondents expect an uncertain business outlook, up from 58 per cent in 2024.

Almost three in five employers, or 58 per cent, are planning to freeze headcount in 2026, according to the survey. This is up from 50 per cent in the 2024 poll. Small employers – those with 50 or fewer employees – are more likely to do so, at 63 per cent.

However, the percentage of respondents in this year’s survey that plan to reduce headcount (8 per cent) were largely similar to last year’s (9 per cent), with large employers – those employing more than 200 employees – being more likely to make such manpower cuts (12 per cent).

One-third of respondents plan to increase hiring.

As for the wage outlook, just under half (48 per cent) of the employers surveyed said they plan to carry out wage moderation or wage freezes in the upcoming financial year, up 10 percentage points compared with FY25. Employers indicated plans to give a lower wage increment compared with the previous year.

“This indicates more caution in wage outlook among employers, particularly among small and medium-sized employers,” said SNEF. Mid-sized employers refer to companies with 51 to 200 staff.

Rising costs continue to be the top manpower challenge cited by employers for the next 12 months, at 79 per cent. This is almost similar to 81 per cent in 2024.

Other challenges cited include attracting and retaining professionals, managers, executives and technicians (47 per cent) and a shortage of high-skilled, local talent (42 per cent).

SEE ALSO

Singapore firms plan to dial back on raises, bonuses amid uncertainty: survey

Of the employers surveyed, 62 per cent plan to provide a competitive employee salary and benefits package to alleviate these challenges – down from 70 per cent in 2024.

Other ways to alleviate manpower challenges that were highlighted include upskilling or reskilling employees to meet evolving business needs (45 per cent) and providing more flexible work arrangement options (30 per cent). But the latter method saw a significant decrease from 49 per cent in 2024.

“Navigating 2026 cautiously”

Despite the more cautious outlook, most employers that hire lower-wage workers, at 96 per cent, have plans to provide them with built-in wage increases in the coming year. This reflects continued employer commitment to uplift this group of workers, SNEF said.

Nearly 40 per cent of employers plan to give higher wage increments to lower-wage workers than to other employees; 33 per cent have plans for similar increments for employees. The remainder indicated that other factors such as performance would be more important than differentiated wage increase based on wage levels.

Hao Shuo, SNEF’s chief executive officer, said: “Employers are navigating 2026 cautiously, in view of rising costs of doing business and uncertainties in the overall global economy. ”

But he added that it is “heartening” that employers continue to invest in their employees, especially lower-wage workers, as “such investments ultimately help them build a stronger, more resilient, and future-ready workforce that can help businesses capture new opportunities in uncertain times”.

He also encouraged employers to align their wage decisions with the recently-released National Wages Council Guidelines, for fair and sustainable wage adjustments.

The 2025 edition of SNEF’s manpower and wages outlook survey was conducted between Jun 25 and Aug 15. It gathered responses from 238 employers, hiring more than 120,000 workers. Respondents came from 19 industries, and included companies of various sizes.